Conference Call with Sterling and Wilson Renewable Energy Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Construction & Engineering company Sterling and Wilson Renewable Energy announced Q2FY25 results: Financial Highlights: Revenue has grown 36% YoY in Q2FY25 aided by higher execution in Domestic EPC projects. Sequentially, top-line grew by 13%. Gross margins came in at 10.1% in Q2FY25 compared to FY24 gross margin of 10.3%. With legacy international projects behind us, gross margins are likely to continue to trend at ~10%. O&M; gross margins at 28% are higher than average due to lower expenditure incurred in Q2FY25. However, we anticipate these margins to normalize due to post monsoon maintenance in H2FY25. Recurring O&M; margin are trending towards more steady-state margins (~25%). Reported Q2FY25 EBITDA at Rs 51 crore (4.9% EBITDA margin). Q2FY25 PAT of Rs 9 crore while significantly higher (both YoY and QoQ) remains impacted by a non-cash deferred tax asset charge Gross Borrowings have increased on account of a new facility availed from IREDA (Rs 500 crore). Indemnity proceeds of ~Rs 109 crore are anticipated to be used to pay off H2FY25 debt repayments / prepay existing loans. Net working capital continues to remain negative at Rs 543 crore as at September 2024 compared to negative working capital of Rs 585 crore as at March 2024. Unexecuted order value at ~Rs 10,549 crore as of September 2024 compared to ~Rs 8,084 crore as of Mar 2024. Company has received new orders in six domestic projects worth ~Rs 2,044 crore post Q1FY25. Received order for EPC of the largest BESS project (1 GWh) in India. Received turnkey LOA for 312 MWdc project in Rajasthan. P&L; of the company continues to improve. Consol revenues up ~36% YoY in Q2FY25. Gross margins at ~10%. Third consecutive quarter of positive EBITDA, PBT and PAT at a consolidated level. Long-term Ratings upgraded by Acuite to BBB- (investment grade) from BB+ on Oct 14, 2024. Gross Borrowings have increased due to a new loan facility availed from IREDA. Total net debt of ~Rs 326 crore as of Sep 2024, compared to net debt of ~Rs 116 crore in Mar 2024. Indemnity proceeds to largely take care of debt repayments due in H2FY25. Execution scale up in H2FY25. Utilization of new Rs 500 crore IREDA facility. Negotiating open credit from key vendors. Fresh sanctions of NFB limits from new banks / FIs. Other Highlights: Received order of 633 MW DC in Q2FY25. Received LOI for largest BESS plant in India. Received LOI for a PV project in Karnataka. Received order of 250 MW DC in Q2FY25. Received order of 900 MW DC in Q1FY25. Received a turnkey solar PV order from AMEA Power in South Africa for a ~140 MW DC project in Q1FY25. Received a turnkey package for a 80 MW AC project from Energy Group in South Africa in Q1FY25. Sterling and Wilson Solar Solutions, Inc (SWSS), the US step down subsidiary signed a MOU with the Government of the Federal Republic of Nigeria, along with its consortium partner Sun Africa in September 2022. MOU is for the development, design, construction, and commissioning of solar PV power plants aggregating 961 MWp at five different locations in Nigeria along with battery energy storage systems (BESS) with total installed capacity of 455 MWh. Final terms have been negotiated. Procedural steps are in progress; Awaiting final contract signing Result PDF